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08/10/2019

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China Trends #3 - Dotting the I’s and Crossing the T’s: Sino-Russian Cooperation in Action

Author

François Godement

Special Advisor and Resident Senior Fellow - U.S. and Asia

The last three years have been good for Sino-Russian cooperation. If one looks at milestones, Sino-Russian trade passed the $100 billion threshold in 2018 and is still growing in 2019 : remarkably, this comes with a stagnation of Chinese exports but a constant rise in Russian sales – energy is the key mover here, and Russia therefore is a rare case of running a trade surplus with China. Indeed, new gas pipeline projects are under way beyond what already exists. The relationship has also been about military maneuvers – after the 2017 Russian-Chinese show in the Baltic, the two countries staged joint air patrols in North-East Asia during the summer of 2019, leading to an incident with South Korea. China took delivery of S-400 surface to air missiles in 2018 and 2019. Russia is moving towards Huawei for its future 5G network – a move which would reward very long efforts by Huawei to woo the Russian market. At the United Nations, there is currently no light between the two countries. The two move in lockstep on many issues – including on isolating and controlling their social media.

Our three authors provide background and nuances to this picture. Eleanor M. Albert explains that the two countries see themselves as facing the same pressure from the United States. China counts on Russia to support its views on international institutions and the "power shift" to Asia, in part because Russia is integrating itself within Eurasia: Moscow’s Eurasian Economic Union fits nicely with the Belt & Road Initiative – and one might add, is not much competition either for China. A key to this may well be what Viviana Zhu terms "a buyer’s market" for energy.

China counts on Russia to support its views on international institutions and the "power shift" to Asia, in part because Russia is integrating itself within Eurasia.

China is becoming more dependent on Russian energy – 11 % of its imports, but that’s a welcome diversification from the Middle East, or from American liquefied natural gas (LNG) at a time of trade tension. As of 2019, Russia is becoming China’s largest supplier of oil. But neither Russia nor any production cartel control the price any more: the greatest dependency, for cash, is still Russia’s. China’s experts do not hide their country’s hand too much, when they explain that oil and gas resources from Central Asia can also compete with Russia’s.

Our third author, Angela Stanzel who is also the editor of China Trends, relays the bullish views of China’s strategic experts on a closer military cooperation between "especially friendly armies". A long-lasting factor is the relative disarmament on both sides of the Sino-Russian border. Another is terrorism and the "three evils". Another argument cited by a Chinese strategic expert seems contrived: is there really a common continental and largely defensive posture between China and Russia as he claims? In spite of earlier military sales, the weapons pipeline seems to be running dry since 2017. One may speculate that China’s defense industry now reaches the takeoff point where it hardly needs massive Russian hardware.

It is not a case of "hot politics, cold economics", one Chinese expert explains. He has a point. Putin’s Russia reduces its isolation from sanctions and gets a cash lifeline from its energy sales; China finds a twin brother at hand as it hails "multilateralism" in international organizations, but neuters the impact of international law on key issues such as maritime sovereignty and human rights. This is something more than an "axis of convenience" (Bobo Lo, 2008). Moscow "moves deeper into China’s embrace" (Alexander Gabuev, 2018) and China draws a political dividend. But that embrace could prove rather smothering for Russia.